Thursday 31 January 2019
Section 324 of the Fair Work Act 2009 only permits certain types of deductions. Those are when:
The Act goes further to state that even where authorised under an agreement or award, deductions for payments that are directly or indirectly for the employer’s benefit will have no effect.
Examples of permitted deductions under the Regulations include:
Other permitted deductions include:
Some examples of deductions that are not legal under the Act include:
Most employment contracts will have provisions about deducting wages where there has been an overpayment, which is permitted.
Some employment contracts will also have provisions regarding the deduction of wages where an employee has not provided you with sufficient notice on termination. Is this legal? There is nothing preventing you from having such a provision in the contract, however, unless the deduction for notice of termination is expressly permitted under an award or enterprise agreement, it will not be permitted under the Fair Work Act.
Where you have deducted wages from an employee for one of the illegal reasons outlined above, the employee can make a claim to the Fair Work Ombudsman and/or the Federal Circuit Court for the wages. This could result in you having to pay back the wages and potentially a fine of up to $51,000 per breach of the Fair Work Act for a corporation.
For further information of advice on your HR matters, please contact us at firstname.lastname@example.org or (07) 3832 5665.